Tanker owners set to benefit from rising freight rates

Consumers could be hit by extra transport costs as shipping movements are delayed by tighter security at ports and vital commodities such as oil are affected by higher tanker rates.

Shipowners themselves are facing higher fuel costs - which they will try to pass on to customers - as a result of increased crude oil prices.

Tanker freight rates are expected to rocket upwards today as oil companies and traders grab all available vessels for fear of a shortage.

Jim Buckley, chief executive of the Baltic exchange, said: "This is a terrible tragedy on a scale we cannot come to grips with yet. But I would expect to see the tanker market shooting up."

The Baltic, centre of ship trading in Britain and itself hit by terrorist bombs in 1992 and 1993, kept its City base open but it remained extremely quiet.

P&O closed its US offices in New Jersey, the local headquarters of its P&O Nedlloyd container shipping venture, while New York port was closed as employees fled home to check on the safety of their families.

The World Trade Centre in New York at the centre of the attacks was the home of many shipping organisations, including the port authority of New York and New Jersey.

London-based H Clarkson, the world's largest shipbroker, believed that some owners might benefit from a short term increase in freight rates but the long-term effect on transportation could only be negative.

Martin Stopford, a managing director of Clarkson, said that most shipping sectors had seen their freight rates fall by half since last year.

The Clarksea index of freight rates, which covers 14 markets, peaked at 25,500 points but had since plummeted to 13,000 points with the cost of loads on Capesize tankers down from $24,200 per day in November last year to $7,300 now.

One of the shipping sectors most vulnerable to uncertainty is the cruise side with companies such as P&O Princess dependent on the continuing boom in consumer spending.

But liner operators such as P&O Nedlloyd are also very sensitive to private purchasers willingness to keep on buying the household goods carried in containers.

Shipping experts predict that container movements through US and western European ports could be disrupted in future as security checks are stepped up.

Dry cargo operators were fearful that the movements of steel and other goods would slow down as the terrorist attack further damages economic confidence.

Uncertainty is expected to jolt tanker rates up but longterm any disruption of oil supplies or an increase in crude costs will reduce demand for hydrocarbons and the vessels that carry them.

Last night tanker owners were refusing to accept new vessel hire deals in the belief that the only direction for future rates could be upwards.

London tanker brokers said no business had been concluded since the attacks in the US had got underway.

"They are playing a waiting game. But this should be followed by frantic activity tomorrow," one said.